Crouching Rebel

Life's been full of setbacks and ripostes for Jimmy Lai, the publisher of the saucy Apple Daily newspaper and Next magazine, among the most popular publications in Hong Kong and Taiwan. Mainland-born Lai made an early fortune in sweater manufacturing before founding apparel retailer Giordano in 1980. With his retail expansion blocked because of criticism of China's government--famously calling China's premier "the son of a turtle egg"--Lai turned his focus to the media industry and has thrived despite ad boycotts in Hong Kong by pro-China tycoons opposed to his pro-democracy views. Lai's wish to enter broadcasting suffered a big setback in November when his attempt to buy Taiwan's China Times failed at the last minute. (The company went insteadto billionaire Taiwan noodle tycoon Tsai Eng Meng.) But he's still got big ambitions there, as well as a surprising notion about the mainland. FORBES ASIA talked to Lai over tea and croissants at his home in Hong Kong's luxury Kadoorie Hill area.

FORBES ASIA: What's the outlook for the media industry in 2009?

Lai: Business is going to be tough, very tough. We're better than our competitors, but still we are suffering. People are holding their money. They aren't spending it. So retailing has been battered, and that affects ad revenue.

How much is it a seeping of revenue to the Internet?

The more I look at it, the more I think the impact of the Internet in the business is not as crucial as I once thought it was. As long as people's daily activities don't change, there is still room for the old media. I'm not as pessimistic about newspapers as people in the U.S. are. You have industry bankruptcies. But this is the time that newspapers have to change. Newspapers have to be more visual, have better quality.

The Internet has allowed information and knowledge to become more common, making them very cheap and very accessible. But at the same time it also has made quality knowledge and information a lot more inaccessible. Because you've got a lot of junk in front of people, people spend a lot of time and still can't find something of quality to read. I think now is actually the time that we are going into the trend of elitism. People will try to buy quality. People will relate to the elite class again. The reason why the Internet is not making money is because it is something that is so common that nobody is willing to pay money for it.

How are you hoping to do even better at Next?

For our newspaper and magazine, graphics. You have a news story, but you can also have a graphics story alongside it. So instead of spending 20 minutes, you can spend 20 seconds and get the full content, because people can assimilate information with images so much more efficiently than text.

What about TV? You weren't able to buy the China Times in Taiwan.

We will try to buy TV stations in Taiwan. We will make careful calculations for spending money to create content and then buy existing channels. We like to think that spending money in-house (in a Taiwan studio) to try to make some innovative programming is more efficient. We believe that you have to go through trial and error to really create some excitement in the TV business, which looks very old to me--very dated. Taiwanese TV is very exciting, very competitive, but it's pretty parochial.

Will the Apple TV channel be a news channel?

We like to think that we are a news media company. Whether it is news or financial news or entertainment news or documentary or talk show, that's all our production. But if we have to go out to have drama, we will go out to partnership.

Why start in Taiwan?

Taiwan is the only market that we can operate in--it's small, but it is bigger than Hong Kong by three times. Taiwan is more accessible to us because we have the biggest newspaper and magazine there. We are known there. It is a democracy. We have the freedom of media. So it is easy for us to get into the TV business without too much hassle.

The new Ma government is friendly?

The government doesn't intervene in the media business. There is also an opportunity for us--a lot of the Taiwan media will be bought up by people who are friendly with China. I'm sure that a lot of the Taiwan businessmen in China will awaken to the advantage of owning media in Taiwan which are friendly to China. That trend is inevitable. The market will be narrowing down to people like us who are independent and people like those who are China-leaning. And once you are China-leaning, you lose credibility.

What's your time frame?

We have to see how deep this financial meltdown is. I guess for the next year, we have to sit tight and do our programs in-house and find out what is good. It won't be more than two years, but it won't be one year. We're going to buy some channels. Maybe some bankrupt, fading channel.

But wasn't there opposition to your taking over the China Times?

Yes, because we are very controversial. We don't give anybody face. So a lot of politicians were afraid that if we took over the China Times, we would be the biggest media company in Taiwan.

What about other markets?

Taiwan is definitely the first market that we should think about in TV. It's a culture that I understand.

The China market?

China now has to face up to the slowdown in the economic expansion. I think the economic implosion will nudge the Chinese regime to be more liberal in thinking about political change.

What would that mean for Next?

It will mean that we would go into China. By selling our programs that we make in Taiwan into China. Or by having our own TV stations there. The change will be tremendous--day and night.

I'm a senior editor and the Shanghai bureau chief of Forbes magazine. Now in my 16th year at Forbes, I compile the Forbes China Rich List and the Taiwan Rich List. I was previously a correspondent for Bloomberg News in Taipei and Shanghai and for the Asian Wall Street Journ...